* VW completes sale of 1.2 bln euros of convertible bonds
* No plans for acquisitions-sources
* Bond sale "to ensure group's financial stability"-CFO
(Adds sources, detail, background)
By Jan Schwartz and Andreas Cremer
BERLIN, June 12 Volkswagen AG's
second bond sale in seven months aims to bolster finances
strained by takeovers, rather than readying the group for
further acquisitions, sources close to the German automaker said
Europe's largest car maker said on Tuesday it will sell up
to 1.2 billion euros ($1.6 billion) in bonds that will convert
into shares, following a similar issue VW placed last November.
The sale was completed on Wednesday.
"There is no concrete project" planned on acquisitions, one
of the sources said on condition he not be identified because
the matter is confidential.
NordLB analyst Frank Schwope also saw the convertible sale
as related to the group's financing requirements. "Capital
resources are key to VW, they're filling their coffers," he
said. "Acquisitions are not on the cards, they've got their
hands full with their 12 brands."
Wolfsburg-based VW is in the process of buying out
shareholders of truckmaker MAN SE after taking control
of the company and last year completed the purchase of sportscar
The maker of the Golf hatchback also plans to build seven
more factories in China and is rolling out a costly engineering
system to plants around the world to facilitate assembly of
small and medium-sized cars.
Net liquidity in the company's core automotive business
plunged by a third in the space of a year to 10.6 billion euros
"It's part of VW's strategy to ensure financial stability
and soundness of the group at all times," finance chief Hans
Dieter Poetsch said on Tuesday. "Our aim is to maintain the
favourable liquidity position, the strong capital structure and
our good (credit) rating."
The new mandatory convertible notes have a coupon of 5.5
percent and were offered at an issue price of 105.64 percent of
their principal amount.
Upon maturity on Nov. 9, 2015, the notes will be converted
into preferred shares without voting rights from Volkswagen's
existing conditional capital.
VW investor Qatar Holding LLC has agreed to buy new mandatory
convertible notes, VW said, without specifying the amount.
JP Morgan will act as bookrunner of the transaction.
($1 = 0.7533 euros)
(Editing by David Holmes)